Hi, and welcome to this week's episode of Money with Alpha. This week I'm talking about how to manage your money in times of uncertainty. There's a lot of that going on at the moment. In particular, I mean, to be honest, there's always been times where there's been uncertainty in the world. I think in the financial space, it's probably heightened at the moment. There's all sorts of things going on in the world. There's changes of leadership in countries, there's elections in other countries. So, you know, when you, when you look at what's happening in the US and there's, you know, there's national elections at the moment, depending on you listening to this happening. In Australia and Canada, they've had elections and a change of government. In Germany, like, there's been. There's so much going on and then there's political turmoil around the world and strife as well. So how does that impact money and how does that change or not change what you're doing? So there's, there's three areas that I want to, I want to cover in today's episode. One is clarity of your lifestyle vision. Two is either to set up or to stick to your money system. And number three is don't check the numbers too often. So I'll go through each of those. Firstly I'll start with clarity. To be honest, it's one of always the first things that I start with, because without being clear on what you want and why, it makes it very difficult to monitor how things are going, to track where you are, to see where there could potentially be gaps. What is it that you're actually even striving towards? Do you know how close you are? Do you know where you need to get to, like, all these things? Do you know how much money you want and need? Where are you going with all of that? And so there's that. That piece is first. So first of all, there is the awareness of you as a person and who you want to be and how you want to live your life. And so what kind of lifestyle goes with that? If you've listened to me before, then this isn't going to be terribly new, this part. But it's very much about, you know, well, what kind of like, do you want an extravagant lifestyle? Do you want to have something really, really simplistic where you want to try and live as off grid as possible and you want to caravan around the country and you just want to, like, minimize your possessions and responsibilities as much as possible. Its interesting, I think different seasons of our life, we swing to different sort of types of lifestyles. When we're younger, potentially we might want something that's a little bit more like glamorous, fast paced. As we get older we kind of like, oh my gosh, the idea of having to deal with all of the things that go with a faster paced lifestyle. I just want simplicity. And you know, if I have a bigger house and that's just a bigger mortgage potentially and then more to clean and more rates to pay and more things to look out for and take care of and all of that. And I've seen other extremes where, you know, I had a client this morning where it lives in someone's property that backs onto a nature reserve. And it is super simple, super low cost, just beautiful. Patchy Internet, but beautiful. So is that, what is it that you really want? What, what lights you up? If you don't know, then you need to go figure that part out first. And then the money side of it will start to become a little bit clearer as well as, as a ballpark. I was reading, I mean there's this benchmark studies that are coming out all the time and there's certain Limits that they put for retirement and how much we all need to have sort of, I don't know, I'm dignified is the word that gets used. But a nice comfortable retirement for a single, that's meant to be around $50,000 a year. And for a, a couple it's about 75,000. This is Australian dollars. I have read a book recently which had $100,000 for a couple and I thought, wow, that's, that's, that's going to be a nice retirement. But then that's also quite a bit more to strive towards on a, on an annual basis too. So if you wanted say the 50 grand, if on your own and then you calculate it for say 25 years worth of retirement, you're looking at just over $1.2 million. And that's the amount you would need to have in assets, growth assets by the time you retire. So if you have a look at what your overarching kind of net worth is now, then you can sort of see where the potential gap might be. You might be closer than you think, you may be further away than you think. There might be things happening in your life that you know is going to change this. So it might not be possible to make too many adjustments to it right this moment. But at least having little bit of an understanding will at least help you then with the step two, which is to set up and, or stick to your money system. So when you start to sort of look at how much your lifestyle is currently costing you and how much you would like it to as well, so you can, so you work with all these things go, they're back and forth. So you look at your vision, you look at your money strategy, and then you kind of go back and forth. So it's very much what's the helicopter view, what's the detail view? And let's iterate from there. So when I say set up a money system, if you don't already have one I'll go through what the concept is. I won't go into too much detail about how to set it up in this episode, because that's a whole other episode on its own. But setting up a money system is basically having visibility over your money. So knowing where it's coming from, how much you're getting, and we'll talk monthly basis, but then where it's also going. And the question I get asked a lot as well, if I get extra money, what do I do with it? You're like, aha, huh. This is where you need a system. And even if you don't get like extra money, you still need to know what to do with your money anyway. So having a system is really, really important. And it's linked to your vision, it's linked to your values, it's linked to who you are as a person. So that's why I put the clarity piece first. So then the system itself becomes again, awareness of visibility. Where is your money coming from? Where is it going? You know, this money that sort of gets spent every month. You tap a credit card or you're paying, even if you're paying cash, where is it going? So some things will just add up. Timing makes a big difference as well. You know, when do you receive your income versus when does a bill come out, what time of the month? That that sort of thing does help, but it's just generally, generally just being aware of, you know, how much things are costing you. How much is your insurance costing you? We all have so many different insurance. It's not funny. If you own a home, you've got home insurance, you've got contents. You can have pet insurance, you have personal insurances as health insurance car insurance, there's all sorts of things. There's so much that goes with adulting, unfortunately. And that's just the insurance space. Then groceries, eating out, entertainment. So where, where kind of are you in that ballpark? And it's handy sometimes to go into the detail a especially if you feel like you're overdoing it in some areas. Otherwise, you could literally just get a bank statement and it tells you money in, money out. You're like, okay, money is this amount. Money out, this amount. That means at the end of the month, I should have this amount left. And then you'd be like, where is that money? Because quite often say you've got 10 grand coming out, sorry, coming in and 8 grand going out. You're like, well, where's this $2,000? I don't see that. Anyway, that's when you need to know what you're actually doing with it. Because it's amazing how that 2 grand can just disappear. It always astounds me how easy that is. It doesn't have a purpose or a label attached to it. By label, I'm talking about, is it for saving, is it for investing? And even if it is for saving, what is it saving for? So just a few examples of some of the things you could split that extra 2000 hypothetically out into would be saving for a new car if you need a new car. Saving for fun, saving for a rainy day or emergencies. Saving for an investment property, saving for investments in general, chopping up your super supporting family members, like what charities, whatever it happens to be. That's important to you. It's very important to be clear on that because that is what is going to drive the decisions that you are making. And it also then means that when you do have extra money for whatever reason, maybe you get a tax refund or you get a bonus at work, or you've worked a little bit extra so you get a bit more pay this month. That you know where it's going to go. Because when you know where it's going to go, then it will have somewhere to go and it will go there rather than just wherever it wants to go, which is in. Into the ethers. So that's setting the system up. If you already have a system uncertainty, provided your vision is accurate and it's reflective of what you want, it shouldn't change too much unless your income is changing or your spending is changing as a result. Even your system, it's set up with percentages, so it shouldn't really change too much. What's important to you may change. It might end up being the only time you'd really review it. Like, for example, when we were saving up for a car, bought the car, I was like, okay, well I don't need that slice of percentage in my money anymore because we bought the car, don't anticipate buying another one for a very long time. So I'm going to reallocate that somewhere else. So that's really when you would look at it. Somebody creating extra tariffs in the world that makes the share market plunge is not going to stimulate or trigger me to change my money pie. That level of uncertainty is, is, it's too out of my control. I am going to focus on what I control, which is how I manage my money. So, and I suggest you do this, focus on what you can control, which is your money system, and look at the percentages you have there. Sometimes the dollar figure attached to those might go down some months, especially if, you know, there's been an extra bill that's come or something that costs more than you expected or something, you know, the washing machine broke or something like that, where you've had to delve into, into your savings and hopefully you've got an emergency fund to cover them. But still have that system and work it, allow it to work. Quite often we get so impatient with something like, oh, this doesn't work. You're like, well, how long have you been doing it? Oh, yeah, two months. Okay, well that's not long enough. It's a little bit like a diet expecting to see results after like a day like, oh, I ate really well yesterday. Why isn't it showing on the scales today? It takes a little bit longer than that. So it's the same thing with money. You need to really give your money system a decent shot. And by decent shot, I'm saying at least six months. Six to 12 would be great. That does. That's not to say that you don't make any changes in that time. You might start to see how you manage things and you go, okay, well, I might actually do this in the middle of the month rather than the end of the month. Or I might change this percentage here. Or we've now decided we want to do this holiday, which means that little need a little bit more in the fun fund. So I might sacrifice a little bit of the, you know, the emergency fund to put into the fund fund because the emergency fund is pretty healthy. So I might just reallocate things a little bit. They're the kind of tweaks that you make. You're not making fundamental changes, just little things. Sometimes you don't make any, like there might be some years where I don't make any change year on year. This year I did make a little change because I just got, my daughter's got three years left of primary school, I thought start saving for some high school fees if we go down that path, if we don't, then I'll use that something else. So it's, it's having that, that future view, that future vision of the lifestyle that you want and putting some money aside for that little by little because it's a heck of a lot easier to do it incrementally than it is to suddenly have to try and find $50,000 or you know, 20, whatever the amount is. So that's why set up and, or stick to your money system. If you don't have one, set one up. If you do have one, you can do a high level review but just keep, keep working the system. And so then finally don't check your balances too often. And by balances I mean investments like superannuation and other investments. Your savings balances shouldn't vary too much because they're more stable. The interest rates on your savings may change depending on what's happening with overarching interest rates in the market. But if you've just got your savings sitting in cash, which is in high interest bank accounts, which is what I suggest, then those balances you should just see a steady uptick depending on what's going on, if you've needed to pull from any of the accounts or not. But your investments accounts, don't look at them every day. I was at an expo one time and this lady came to me, she said, what advice can you give me about my super? What do you mean? She says, oh, it keeps on going down. I was like, well stop looking at it. If you don't need it right now, just stop looking at it because it's going to go up, it's going to go down mine. Recently there was this announcement about tariffs. My super, you know, I shouldn't say plunge, but it dropped and then within a week it was halfway back again. So I thought this swings and roundabouts, you can make yourself crazy staring at all this stuff. So I would just suggest just, you know, that's that calm the farm, just don't check it all too often unless you need to sell. And the whole point of these sorts of strategies, money strategies and money systems, is that it's setting you up incrementally for the future. So unless there's some exceptional event or some tragedy that happens, it means you need to tap into it and you don't and you need to sell. That's different. But if you don't, just keep going, keep following the system, just hang on to things, don't, don't, you know, react emotionally and freak out and sell things when you don't need to and don't want to just because you see everybody else doing it. If it doesn't match up with your system and your strategy, just leave it. Again being clear on what you want and your own personal circumstances is vital in this case. So all this is just information and perspective and opinion in relation to all of this. So the first one that I went through, like I said, was clarity of your lifestyle, vision, understanding how much money you need to support that, setting up or sticking to your money system. And then don't react and get too crazy about checking the balances of your investments too often if it's something that's for the long term and you don't need to check and do anything about it right now. So that's, that's my, that's the way I approach uncertainty. And I hope that's helped give you a little bit of a more stable perspective on all of the, the ups and downs and the, the dips and the peaks, all of the bears, the bull market, like all of the terminology that we're reading about in the media, hopefully that's helped make things a little less. What's the word overwhelming and, and attention grabbing and just made it a bit more simple. So with that, enjoy the rest of your week and I will catch you next week.
